Daily_Nifty_VP's View-07/01/13

LEADER POST for Monday (07/01/13)

1.         Supports are at about 6001, 5988, 5967 and 5922 while resistances are at about 6025, 6034 and 6056. Two likely +WWs give about 6051 and 6120 (+WWs with higher targets are not mentioned as of now). Six likely -WWs give about 5996 (once below 6013), 5990, 5982, 5975, 5962 (once below 5999) and 5951 (once below 5976) (other -WWs with lower targets are not mentioned presently). Nifty seems to have broken out of a channel and can give 6090. But if it goes down and breaks below 5965, it may go down to the bottom of channel, which is placed at about 5840. A bullish flag gives higher targets unless killed below 5996.

Nifty closed at a new high again, giving bullish sentiment. However, the daily candle is again a hanging man, a likely reversal sign. It again gives an impression that nifty may have formed a top on closing basis. Also, the -ve div still persists on the daily chart. Nifty needs to close above 6017 to negate the effect of the hanging man and remain above for a few days to kill the -ve div. If however, nifty closes below 6016 and that too with a gap down open below 6011, the reversal may be confirmed. However, it should be noted that weekly chart does not show any weakness. It means that the reversal, if any, may be shortlived.

2.         PCR up at 1.05 and VIX at 13.37. Pre-open high/low at 6194.40/6016.15 and close at 6042.15. The inverted hammer of 10tf candle may indicate a -ve nifty unless NS remains above 6042 for at least an hour.

3.         AS PER 9.30 STRATEGY, SELL ABOVE 6040NF, TARGET 6007/5994, SL 6070.

4.         Target of bullish flag met in the open itself.

5.         A bearish flag give 5996.

6.         Targets of first three -WWs met.

7.         5980/77NS is a good support.

8.         Nifty opened up with a gap thereby making a new high but immediately reacted, finally making a lower low than yesterday before closing -ve (as indicated by the pre-open data) and also below yesterday's close. The targets of first three -WWs and the bullish flag of the first post were met but that of 9.30 strategy trade was just missed. Target of a bearish flag identified during the day was also met. Nifty has reversed from 5977 as of now. The daily candle is a bearish engulfing one.

The intraday chart of nifty spot values with 5 min candles is shown below.